Transcripts For BLOOMBERG Market Makers 20150316

Eric is out all week. Ive got an allstar cast of guest anchors. How was your weekend . Guest it was good. I played with my iphone. Pretty uneventful. I didnt even make it out of my house very much. Stephanie you didnt go see cinderella . i did not see it, but my kids did. The top business stories of the morning, for the first time in 11 days, Vladimir Putin has been found. He has been seen in public. He met with his counterpart from cargo stand. It not been seen and public since march fifth. That led to speculation about his health, even his grip on power. He has no problems. He today said it would be boring without gossip. Valiant has won the battle. And no international has withdrawn its rival bid. They make drugs for stomach disorders. They are all trying to find new drugs. There is a new ceo at sothebys. Tad smith will take over at the end of the month. Ruprecht had been pressured to create more money. Oil resumes its slide this morning. It had a six year low after falling 10 last week. Crude is off 3 . West texas and immediate fell below 44 a barrel. There is speculation that the oil glut may force the u. S. To run out of storage capacity. That would put more crude on the market. The United States has resumed talks with iran over its nuclear program. John kerry flew to switzerland to meet with the foreign minister. Important steps gaps remain. He warned of the clock is ticking toward a deadline at the end of march and alternately the United States may have to like way. He had sharp words for the author of that republican letter to iranian leaders. Im not going to apologize for unconstitutional on thought out action by someone who has been in the senate for 60 days. Stephanie he was referring to tom cotton of arkansas. The letter warned that congress and future president s could overturn any idea made by president obama. Ladies and gentlemen, march madness is here. Its time to fill out your brackets. Kentucky had the overall number one seed. The pairings were announced yesterday. The American Gaming Association estimates there will be 9 billion that on this turn of it. Odds makers say the wildcats are even money favorites. The championship game is in indianapolis on april 6 i am working on my bracket diligently. I was passionate about my bracket and i bet against my alma mater lehigh. Betty guest i always fill up my bracket an hour before the deadline and then my first round is a disaster. Stephanie do some homework. Youve got a couple of days. Get your game on. Guest its a lost cause for me. Stephanie i think i would love for you to be in. Dont bet against your alma mater. Lets get back to oil. He is the former cio. Is this a good thing . Guest im still getting over that point lets get to a loser and then you introduce me. It should be positive in the sense that it is a big metal tax class tax cut. The money is not being spent. The said may begin to raise rates. The oil story is confusing. That is the best way to put it. Betty is this the moment where they take patients out of the conversation . Guest on the one hand employment is heading the right direction. Inflation targets are below what they would like. Wage targets are below what they would like. Basically, the fed is more hesitant than they might have been. I dont think it matters. It does not matter for two reasons. There is no yield anywhere else. In europe, you have to pay the German Government for eight years. In russia, you only get a 6 yield for 10 years in russia. The u. S. Treasury market looks good. From a technical perspective, there is not much supply because the fed has been buying it. There is a lot of demand. Guest what about the timing . Does that matter much . Guest not really. I think we are on an inexorable path to some tightening. It depends on how its communicated. Valuations are a slightly different question. Stephanie you think we can see a pullback . Guest i think you could. This gets to an unusual dynamic. If you are a big pension Fund Investor and you have to have a lot of fixed income allocation you have negative yields and much of europe. You go to the u. S. And you reallocate. There is demand driving equity market. Stephanie is there a credit bubble . If you want to be in the u. S. That sounds like high yield that gets crowded quickly. Guest you have to be diligent on the underwriting. Senior loans are attractive. Is it a bubble . Not really. It depends on liquidity. If you are a longterm investor, you can whether that. Guest is it a rates question . Guest rates will have a kneejerk reaction. I think they will be capped. Maybe greece will scare people to save havens. Europe has three things going for it. It has a falling euro a have oil coming down. What would derail that would be some kind of political event. Some people have taken politics off the table in europe. Greece is not solved. Guest how focused are you on greece . Guest i am focused on it. The downside element of greece is not in the market. Stephanie if greece leaves the euro it that they present for all of those other peripheral countries. Guest that is the big question. Guest you mentioned the spanish election coming up, there is a french political situation. Is this a problem . Will we be dealing with this a long time . This centrifugal pull of politics pulling everyone apart . Guest you have to think of the master treaty. The integration was not done. Its going to take a long time. Guest is there a chance with spain we could see a repeat of we saw in greece later this year where you have a radical left power . Would that shape local markets Global Markets . Guest there is a move toward leftist political momentum. Where do people go when they get nervous . They go to u. S. Treasuries. I think there are caps again. China is the big third leg of this school. They are shifting from building a lot of stuff to consumption. Somewhere between 7 growth target, i think we can expect. They have policy levers. We are not going to see a radical slowdown. Stephanie are you not excited about china at all but you think about the consumer buying power western mark when we start to look at alibaba, there are so many people in china there is great investment that has not been tapped. Guest you by European Companies that export to a growing middle class. More broadly, i think the oil question has to be addressed in the emerging markets. For exporters, it is tough. For exporters like Southeast Asia and korea, its not such an issue. Valuations have come down a lot here it. Guest do you have questions on result where there were huge protests . The data looks terrible. Stephanie unemployment, custom living area and costofliving. Theyve got great weather and greatlooking women. Guest the question is timing. You need some time to get in. Stephanie what are you most worried about right now . You have any seat. You are running a new firm, what are you worried about . Guest you wake up everyday day and you look at the world is throwing at you. People declare that active measurement is dead. I am more about that. I think its wrong. Guest whats the quick argument against that . Stephanie the s p did really well last year. Guest you have to look at it in a couple of ways. If everybody things one thing, its time to consider the alternative area did people are contentious on one side. When the s p do so well . We had monetary possible policy. That is how the stock market started taking. In a sense, everybody is an active manager. People at the big Brokerage Firms used management firms. Now they manage money for client. You have hundreds of thousands of more money managers. They had the median dynamic ready well. Is active management debt . Will you be on the true active side instead of this passive index . Stephanie what does one need to be doing . Guest you have to have the conviction and deviate from the benchmark. That is more rare than you would expect. Stephanie if you had to make one call this year, what is it . Guest why do you have to put me on the spot like that . I think people have the european rate story wrong. Everybody assumes the rates are going to keep coming down. Whats happening is the economics of your are improving and you get this technical vacuum cleaner sucking up all the bond issuances. The ecb is looking at the following euro. My guess is they will modulate to eat much faster than people expect and rates will improve. Stephanie right now, they are needing in trying to buy back a zillion bonds. It was great to see you. Alex friedman is the ceo. He is a Princeton University alumni. Guest we will look at what it cost stephanie to win. If youre serious about collecting art, hong kong is the place to be this week. Guest time to you uptodate on the top stories of the morning. Pictures of Vladimir Putin, the russian president met with the president of cargo stand. Its the first time Vladimir Putin has been seen in public in 11 days. He shrugged off the rumors. Blackstone has agreed to buy the second tallest building in the United States, the willis tower. The wall street journal says blackstone will pay 1. 3 billion. The skyscraper is 1450 feet tall. There is an unusual shooting of two Police Officers in ferguson. Police are holding a suspect who says he was aiming for someone else, not the Police Officers. One Prosecutor Says the police are not buying that part of the story. The officers were shot during a protest at the Ferguson Police station. Stephanie it looks like valiant has won the battle for salix. Get your head around this, 11. 1 billion dollars. That is more than the initial bid which was, by and no international. Endo has withdrawn the offer. Drew armstrong is here. I feel like i am here every week doing another one of these. Its more than a stomachache. There big deal is for diarrhea. You go on vacation to mexico and you have vegetables. Its going to sell about a billion a year. There is big money in travelers symptoms. It comes out to about 400 million a year. They are adding some new uses they are trying to get approved by the fda. This is the reason why they want this drug company. Youre going to throw this in the tag of your sales reps are in. Stephanie that is the mo. That is what they do. They dont spend money on r d. They rip apart sales forces. They think the drug industry is an efficient. They can find companies with a handful of tropical drugs and throw them into sales rep bags and do a better job of selling them. Its often cashbased stuff. They just look in it and see a broken model for a lot of drugs out there. Its easy for them to take this and rolet in. Roll it in. Guest is this going to slow down at all . Stephanie cant Companies Compete . I think they will have to. They have the money. Look at the deal last week put a 1 billion to buy a cancer deal. Its not like the companies are not doing it. Guest valiant has a lot of headlines. Are more Companies Going to take the same approach . They find Smaller Companies and make them more efficient. You look at a company like activist, they would not say they are anything like valiant. They go after the same targets. Andendo lost out in this deal. They look for targets where they have a couple of drugs they can add in. These midsize or Specialty Pharmaceutical Companies that they can add into the business model. Its more about lets get a couple of new products. Stephanie there you go. I know what he have said about valiant. I remember the fighting. What is the reputation . If you are an employee of salix are you screwed . In a what they are not that different from a lot of other companies. We have seen people cut. Other companies have been closing down. When you buy something, you look for the infrastructure you can cut. That is the way deals get done. Stephanie the ceo gets to walk away with 100 million if he gets fired. Thats not bad of a deal. If you want to fire me and give me 100 million, i will take it. Drew armstrong. Bloomberg news, he covers pharmaceuticals for us. Guest they arent he have one of the most dangerous jobs and now they are working in a war zone. We will talk you take you to the coal mines of Eastern Ukraine. Stephanie weve got a lot more to cover. Vladimir putin reappears after 11 days without a public sighting. Where has he been . He claims people are just gossiping. I dont know. It seems strange to me. Guest i think it might be clever. Go away for a while. Stephanie he wasnt an hong kong but a lot of superstars were. The demand for great works of art is soaring and people and made their way to hong kong this week grade we will have a look. You are watching Bloomberg Television. Live, from bloomberg headquarters in new york, this is Market Makers. Stephanie welcome to Market Makers. Ive stephanie ruhle. Let me ask you about the twitter and meerkats. You were playing on her iphone all weekend. What is meerkat . Joe as far as i can tell, it is a service that allows someone to turn their phone into a live broadcast extreme. We could turn it on and say we are broadcasting and that anyone who follows us on twitter could follow us through a link. I have seen a bunch of people doing it but i have yet to see anything interesting or compelling, the quality is pretty bad. People have been using it for a couple of weeks, but sxsw was the Perfect Moment for it because theyre all of these tech people. Here is me eating barbecued, seeing a band stephanie why this weekend . If you are at sxsw, what support is app in such a big way . Joe i think it is something that hits at the right time people think it is cool. It is not easy to characterize my things take as they do. Stephanie i am guessing that they did a pretty good job raising money. How about some news that you might need. There will be a new ceo at some of these starting april 1. The auction house has been under pressure from dan loeb. They are bringing in tad smith. He will be taking over at the end of the month. Smith will replace bill ruppert who has been under pressure to cut costs and increase shareholder value. Last year, Auction Sales soared hitting a record 6. 1 billion. The fight for Salix Pharmaceuticals is officially over. They have accepted a sweetened 11. 1 billion offer in cash from valeant pharmaceuticals. The company is burning a rival bid from Endo Internationals. Salix agreed to be acquired by 10 billion. They make drugs for stomach disorders. There is a report that authorities are closing in on the hackers attacked jpmorgan. Officials are confident a criminal case will be filed against the hackers in the coming months. The crime was one of the largest ever against a bank. Still, no customers lost money because of it and there was no personal information stolen. Elon musk wants to have one of the biggest problems facing electric car drivers, range anxiety, the fear that you are running out of power. He says he will update software on the model s to sue the drivers about running on electricity during the middle of a trip. The model s has a range of about 270 miles. Benjamin netanyahu does not have much time to turn the upcoming election around. His likud party is running second in the polls going into tomorrows vote. He has offered to make an israeli finance minister on his side to appease those that do not support him. A stunning admission from the air of one of the biggest real estate fortunes in the country. Robert durst appears to actually confessed to murderers whispering offcamera, that he killed them all. He has been the subject of intrigue for many years, decades, in fact. Late yesterday, he was arrested in louisiana for murder after authorities in los angeles issued a warrant. Are you following this . Joe i have not been. I knew about the story. Stephanie robert durst was involved in the taping of a documentary. He then left the microphone on which happens to this girl all the time. Fortunately, i dont have any secret that dark. He walks off the camera and they catch him on tape saying, of course i kill them all. The real question is if this will be admissible in court. He said it behind closed doors in a bathroom. Even if that is not admissible, the fact that they have all of these pieces coming together many people say that this documentary was so well done the guys that did it spent the last 10 years putting it together, possibly in ways that police were not able to. First it was in new york, then callup wonder, and then texas. When he was arrested in louisiana, he was under an alias. Joe i know what i will be watching next weekend. One hour into treating hearing at new york. Scarlet fu is in the newsroom with the biggest movers of the morning. 7. 4 billion dollars of deals announced globally around the world. Two thirds of which are taking place in the u. S. Life time fitness is trading at a record high, being taken private by a group including tpg and the lifetime ceo. This was a longawaited sale of the company. Seven months of exploring Strategic Options and pressure from activist investors. Life time fitness at 70. 66. The north dakota oil explorer that has been trying to sell itself all week others have expressed interest. Now analysts say an outright sale is a low probability event. There is expected nearterm weakness in whiting shares. They say the bedspread is too wide. Stephanie when we return, the underground economy. These guys have not seen a paycheck in months but still they show up every day to keep this ukrainian coal mine running. Scarlet we have breaking news on proctor and gamble. Sending out some headlines that it is looking to potentially sell or ipo its beauty brand in a single deal. It is looking to structure a potential deal of these Beauty Brands. We know they have been tried to streamline their different brands to reduce the number of brands it holds. Now looking to perhaps sell or ipo these units in one deal. This is part of the plan to exit more than 100 product lines overall. We will keep an eye on this for you right now but right now it is up over 2 . A big leg up on this headline that procter and gamble is looking to sell or ipo its beauty brand. Stephanie thank you. Vladimir putin has officially been found. The russian president made his first appearance in 11 days this morning in st. Petersburg. His absence had some speculating about serious illness or even a palace coup. Ryan chilcote is our russia expert. First of all, how big of a deal is it we have not seen him in 11 days . It is a big deal because russia has nukes and it is not every day that leaders of these countries disappear or 10 days. He did the same thing in 2012. The rumor was that he was having back trouble. That is one of the rumors this time around. Now that he has been seen, the question is, what if this happens again . Today when he surfaced with the president of kurdistan, it was a bit awkward. You could feel like everyone knew that they were looking at him for his health, which is sort of what it was like when Boris Yeltsin was in power. Stephanie is this a nonsense meeting . He is having this meeting with the head of kurdistan, but maybe he should have gotten up to the podium and talked about where he had been. The president said awkwardly, all of these rumors about the president s health not only is he walking but he is talking. He growth the around. It was all a bit strange. You can see Vladimir Putin sitting there, kind of sweating not entirely comfortable with the fact that even though he was talking with the leader of another country, all that anyone caret about care about is where have you been . Stephanie technically speaking, what is up with you . Joe is it about his image that he cannot say he was sick . Rather than letting speculation swirled around, why not say he had the flu . Stephanie it is Vladimir Putin. He is superhuman. I dont know, youre asking me to speculate. He is 62, has been in exceptional health. Stephanie we have seen him topless. Maybe it is sort of the cult of the man that can do anything. Maybe he is just messing with all of us. Maybe he wanted to measure how long he could go dark before the world darts panicking. He learned that it is perhaps shorter than he thought. Stephanie you were just in Eastern Ukraine. What were you doing there . This week is the oneyear Year Anniversary of the annexation of crimea. One year to the day that the people voted in a socalled referendum to join russia. It was wednesday of this week that they did that. I went to Eastern Ukraine, ground zero for the conflict, a separatistcontrolled area where you have the Ukrainian Government on the west and russia to the east. I was trying to get a series of reports over what was like life was like on the ground. We are at the coal mine, one of the last edges of Economic Activity in the town and we are heading 600 meters beneath the surface. He has been doing this for 20 years. My father was a miner, my grandfather was. My greatgrandfather was killed by the germans and thrown into a mine. The miners on todays shirts are following in the tracks of at least three generations before them. This is absolutely crazy and not a place to go if you are claustrophobic. Nowadays, the coal is not easy to come by. The miners have to travel further for less. Where we are right now in this mountain of coal is exactly one meter above us, and boy is it dusty. The last time they use the heavy machinery meant for getting a big patches of was two years ago. The richest deposits are gone. The line was slated to close this year but the new separatist government decided to keep it open. These miners are working for the promise of pay. No one has seen their 90 a month paycheck in three months and even then, they only got 40 of the. What is fascinating is these guys have not been paid and they are working because otherwise the whole town will die. They come like volunteers to work. I guess we broke away from ukraine but it seems nobody needs us. We are alone, just survivors. Stephanie this is heartbreaking. They are not making any money and are doing this to keep their town afloat. What does this say about the conflict . Things were not good there, but with the war, it got much worse. The untold part of the story in Eastern Ukraine is that these guys really dont care what country they are part of, as long as someone will pay them. It kind of feeds into the failed state that ukraine is, very pliable, very easy place to shape for russia, if it wants to annex this area. It just gives you a sense, the ukrainians themselves are not very patriotic on the one side and this is a much more subtle affair. Stephanie this is fantastic, are you here all week . Yes, we have three reports. Wednesday, we will look at the economic plight in general. Stephanie Market Makers will be back after the break. Stephanie welcome back to Market Makers. Some of the biggest art collectors are in hong kong this week for art basel, the biggest art fair in asia. We spoke earlier this morning about how demand for great art has dared in recent years. It is hot here in hong kong and im not just talking about the weather. It is almost closing time but people are still crowding the exhibition floor. It has been like this from day one. I was surprised to see so many people here. A collector i wish id wing told me that there were more people here than ever before. Take a listen to the ubs chief marketing officer ubs being the lead sponsor telling us about the energy here in hong kong. The hong kong fair has a very energetic personality. Not surprisingly, hong kong is an energetic marketplace. There is a dynamic that huge that hong kong has a huge impact in the art market. It feels like these are two world going handinhand. He tells me how surprised he was at how the events unfolded here. Vips coming in and out. Usually you get the vip viewing and then you go to the gallery but this year people from art basel were calling asking about more people because more and more kept coming. There were so many at the galleries, it was pretty surprising. Stephanie are these vips visiting and partying or are they buying . Clearly with the drop in oil prices, it has affected russian oligarchs and their ability to spend. What are all of these attendees doing . From what im hearing, they are buying them and say sales have been great this year. Some say that these people are coming from all over the world not just mainland china, but internationally, and this is a new trend in art Basel Hong Kong because it is garnering more National International attention. You have one gallery here in hong kong and a few others in new york telling me that they have customers from malaysia australia, and easy and from the philippines. Swiss, german, russian customers. There is a lot of money being made here. Some say this is worth about 3 billion. Stephanie are they buying specific artists . In miami, buyers were looking for the marquee name, mark rothko, damien hirst emerging artists are becoming very popular. One person i was shadowing was a hong kong art collector and he was very interested in emerging artist. He told me how the prices for emerging artists have gone up so high sometimes he cannot even afford them. In the past 10 years, he could by any emerging artist that he wanted but now they are becoming so popular, he cannot afford them. Stephanie would you say art Basel Hong Kong is all about the business or the party . In miami, it has turned into such a social scene, some might say it is less about the art. It is both but it is definitely the partying as well. Art basel anchors what has been dubbed art week here in hong kong, and that brings together luxury brands, banks, michelin restaurants trying to get the business of everyone coming into hong kong. You are seeing the social life going into overdrive with charity auctions, gallery openings, rooftop parties hollywood a listers. We have learned talk tro, victoria beckham, rubbing shoulders with the stars here in asia. A lot of art but it is also about partying, which is also big business. And it is not just about the glitz and glam. For those with a more modest budget, you have other art events like art central in hong kong, which brings together pieces which are worth between 1000 to 100,000 stephanie what are celebrities like Gwyneth Paltrow and Vittorio Beckham doing their are they paid to make appearances or are they collectors . They were invited to the viewings, but many are doing charity functions. Stephanie that was our own shery ahn, looking out getting to go to art Basel Hong Kong. In the meantime, you get to come back tomorrow. Alex sherman will be here. We will be talking comcast time warner. Live from bloomberg headquarters in new york, this is Market Makers. Stephanie welcome to the second hour of Market Makers Market Makers. I am stephanie ruhle. Alex i am in for erik schatzker. Stephanie this is kind of like the bachelor. We will see who will get the ring at the end of the week. Im just saying, you have two hours. We will see who gets the rose. You have the chance to turn it down. Alex joe is tough competition but are not here to make friends. Stephanie you cover tv and media, much sexier than joe. Lets go to the bulletin. Lets see what we have for you. Actually, we are not going to give you the bulletin. I am bringing in Elliott Gotkine and. We have to talk about the israel election happening in less than 24 hours. Benjamin netanyahu is clearly on the ropes. The polls are pointing to a narrow win for his opposition. I want to take a look at what this means for the overall government. I am going to bring in Elliott Gotkine from tel aviv. What does this mean for netanyahu . Clearly he is against the ropes what is he going to do . Thats an interesting question. It all depends on what results out of tomorrows election. It is important to note that even though things started off swimmingly with that speech to both houses of Congress Morning against the dangers of a bed nuclear deal with iran, and since then, that she was in the poll numbers at that time. The final poll numbers from friday show the opposition could come away with 26 seats and then yahoo Netanyahus Likud with 26. But just because you become the Biggest Party in parliament does not mean that you and your leader will become Prime Minister. It has happened before when he came second in the general election but still became Prime Minister because he was best able to form a governing coalition. So not only did we not know who will win the election tomorrow but even when we know who wins we do not know who will form the government until the various parties play their cards. Stephanie assuming netanyahu does not win, what will happen . With a split government, what kind of progress can we see . In the Zionist Union wins what normally happens is we get the exit polls as soon as the voting closes, which is 10 00 local time, 4 00 eastern time. When we get those numbers, we will be able to see what the rightwing parties and Coalition Partners of the netanyahu government at up to. Then we will also see what the center and leftleading parties would add up to. But there is at least one unknown, and that is a new kid on the block, a former Telecom Minister credited with bringing telephone prices down by about 90 . His party is pulling around a dozen seats. He has already been offered the finance Ministry Portfolio by the likud party. He dismissed it as spin. He wants to wait until the Election Results and then make his decision known. He originally comes from the netanyahu party, but he could swing either way. He could very well be the kingmaker in any new governing coalition. The other big surprise this election is the united arab list. For the first time ever, the error parties representing 1 5 of the population here. They have come together and they could be the third Biggest Party in parliament. So the question is if they would be willing to sit with a jewish block of the party. When the Zionist Party be willing to sit with arab partners . Lets say there is another war in gaza, where they sit idly by . A lot of potential surprises that we could have and some of the smaller parties as ever could will be kingmakers, able to extract major concessions in order for them to join any major government. Alex we know about the tension between the Obama Administration and netanyahu. What is the white house pulling for, do they want one thing to happen more than the other . I think the white house, wisely, will be saving its hand until the results are known and will congratulate whoever wins just as they do with any other democratic countries around the world. Clearly, the relationship between Prime Minister netanyahu and president obama has deteriorated. Indeed, when netanyahu loves insults at herzog, saying that he would sell units down the line, herzog will simply retort i do not question that he run represents an existential threat. I just question that antagonizing our greatest ally and protector in the United States is the best way to go about it. In his mind and heart perhaps obama prefers one or the other. Clearly, the relationship with netanyahu needs to be worked on. I think the u. S. Israeli relationship, leaders throughout history, have always said that it is something that is unbreakable, one of the strongest relationships that you will find in international diplomacy. I dont think whether netanyahu or herzog wins, that the u. S. Relationship will suffer necessarily. That is not to say that the relationship between obama and netanyahu will improve dramatically, but if he does win, he will have some elements of contrition to deploy. Stephanie thank you, Elliott Gotkine. Alex coming up, growing doubts about the big cable deal. The government showed no rush to approve comcasts takeover of Time Warner Cable. Stephanie how super pacs may have even more influence in next years election. Scarlet we have some news to tell you about following up on the handoff we brought you 30 minutes ago with procter and gamble exploring a sale or ipo of its Beauty Brands. This would be a single deal according to people familiar. P g shares at 10 30 a. M. , you can see where they were. They had not determine which products would be separated. The ceo had planned to exit up to 100 lance brent where it was not the market leader. Moving on to a couple of downgrades. Netflix getting a big downgrade at ever core. He cut the stock rating to a cell because of intensifying competition. He says netflix will need to increase its investment but returns are very uncertain in this environment. He cut his price target to 380 a share. Dupont seeing its biggest drop in two months on a double not downgrade from bank of America Merrill lynch. The analyst reduced it to underperform, saying they have some fundamental headwinds in the agriculture and chemical business because the stronger u. S. Dollar. Stephanie thank you. It is time to bring you uptodate on our top stories of the morning. It has been 11 days since Vladimir Putin was last seen in public. Today we finally saw the russian president. He met with his counterparts in kurdistan. The president of russia is not only walking, he drives his guest around. He even drives pretty fast as they say in russia, dont get ahead of ourselves. It would be born without gossip. Stephanie and Vladimir Putin is always offering of something to gossip about. He has not made a public appearance since march 5 and that led to speculation over his help and even his grip on power. In response to the rumors today, he said life would be born without any gossip. Moving on, valeant has won the battle for Salix Pharmaceuticals. They accepted the 11. 1 billion cash offer and Endo International has officially withdrawn its rival bid. There has been an increase in dealmakings among pharmaceutical companies trying to find new drugs. There will be a new ceo at some of these. Sothebys. Madison square garden ceo tad smith is leaving his post one year after his post at msg and will take over at the end of the month. He will be replacing bill ruppert, who had been pressured by dan loeb to cut cost and increase shareholder value. Last year, option sales soared. The second tallest building in the u. S. Will have a new owner. Blackstone group is buying chicagos willis tower. You have probably noted as the sears tower. Blackstone will pay 1. 3 billion. The skyscraper is 1450 feet tall. Blackstone typically buys assets it can improve by filling vacancies or renovating. There is a report that authorities are closing in on the hackers that attacked jpmorgan. They are confident a case will be filed in the coming months. The cyber crime was one of the largest ever against a single bank. Still, no customers lost money because of it and no personal information was stolen. There is an unusual twist in that shooting of two Police Officers in ferguson, missouri. Police are holding a suspect who admits he pulled the trigger but he says he was aiming for someone else not the Police Officers. One Prosecutor Says the police are not completely buying a part of the story. The officers were shot during a protest at the Ferguson Police station. Alex it has been more than a year and no deal between time warner and comcast. On friday, the sec started the 180day review clock again. Analysts and others are increasingly pessimistic that the deal will go through at all. Our guest is with us now. When the deal was announced, the initial reaction was different. Are people still as nervous about this as they were a month or two for your before . Guest there is no question the deal has lost its air of inevitability. Now everyone is concerned about either the conditions being stricter, or more likely that there is a real possibility of an outright rejection. Stephanie lets say the conditions are stricter, why is that not as exciting, takes the juice out of the deal . Guest the question it is is if it was so strict, they would walk away from the deal. The more likely of, is that the doj will approve. If the conditions are accepted, the conditions will be palatable. There are still an awful lot of questions. New york and california are still debating. You have the two separate parts of the government, a separate process between the doj and others. Alex what is the legal ground that the doj could block this . Some say comcast will have too much influence on the industry maybe they should spin up nbc. What would be the core argument for why we are rejecting the deal . Guest vertical antitrust. Stephanie what does that mean . Guest comcast has argued and it is indisputable this will not change Consumer Choice for anyone. In merger parlance, this is not a horizontal issue. All you are doing in time warner territories is changing the name of the door but everyone will have the same number of choices they had before. That part of it does not raise any antitrust issues. The part that does is it comcast gets very large in the provision of Broadband Services then anyone who wants to reach comcast customers, whether you are netflix or google, has to do it through comcast network. So they can charge on the back end on the in just side of the network, whatever they want. Stephanie then the issue is what comcast could be, not what they are now. Guest as comcast gets bigger horizontally, you create market our vertically. The question for antitrust scholars is, there is no evidence of that behavior but you have created a potential for bad behavior and is that a justification for plucking the transaction . Alex an offshoot of this is what the dish ceo said recently when he was talking about how, in a new world of media where all tv is going over the top, access to the internet not through the old traditional ways with cable theoretically comcast could, over a National Bundle and so could time warner, making them competitors, even though they are not today. So you would be eliminating a theoretical competitor. Guest if you decide to argue that netflix is a competitor to comcast rather than a supplement stephanie do you think it is . Guest the jury is still out but some would say i do not subscribe to pay tv because i get my entertainment through netflix. If you believe that netflix is a competitor and netflix has to pay a toll to comcast in order to reach its customers stephanie they shouldnt have to pay its competitors whole. Guest could comcast manipulate that in a way that it is anticompetitive . Could they manipulate that toll in another way, making the traffic slow, making it very cumbersome in order to get an agreement. Even though the government has gone to pull classification of the internet as a utility, there is some who would argue that that is sufficient to protect you against anticompetitive behaviors, but others would say it is not enough. There is too much potential for comcast to manipulate that exchange point. Alex last week, we reported the charter was looking to acquire bright house. Is this a sign that at least charter thinks regulators will improve the comcast time warner merger or are they hedging their bets . Guest i dont think you can conclude either way. The argument it could just as easily be a step to what you do after the comcast deal closes, as it would be a plan b. The reaction i got from a lot of my clients was they would not be doing this if they thought that he was going to break because they want to keep their powder dry to buy time warner themselves. But the reality is if they do this transaction via all stock it is actually a deliberate transaction for charter. It would actually create more dry powder to do the Time Warner Cable deal if you wanted to put more cash into that transaction. You can read the tea leaves whichever way you want, which means it is probably not dispositive either way. Stephanie do you think comcast like to selloff nbc . Could they make the argument, i dont want to be in this business, i dont want to own this anymore . Guest i dont think so, other than that it treats other regulatory burdens. But they still like that business. It is not the growth is this particularly in the Cable Networks that they thought it was when they bought it in 2009. Steve burke, who runs nbc, has been pretty candid saying it is not the kind of growth engine. On the other hand, it is still a business they like. For every rough spot, like the Cable Networks that have not grown the way they hoped, there have been bright spots. The theme parks believe it or not, have turned out to be an absolute home run in a transaction. They have gotten decent value. Anything you bought in early 2009 has paid off. They got decent value and it turned out pretty well. Alex thanks for joining us. You recently downgraded the entire cable industry, so we will see how this plays out. Stephanie craig moffett. When we return, Market Makers has a lot more to cover. Stay with us. Stephanie coming up, you thought super pac for a big deal in the last president ial election . Just wait until next year. They are changing the way candidates run campaigns. Alex why tv viewers are going over the top or overthetop video. Many are now saying goodbye to traditional cable for cheaper alternatives. Stephanie and tv anchors are getting courtier. We are back in a few. Me and ron burgundy for the next half hour. A from bloomberg headquarters in new york, this is Market Makers. Stephanie welcome back to Market Makers. It is 11 30 a. M. In new york city. Alex im alex sherman in for erik schatzker. Lets head back to the breaking news desk. Scarlet fu is taking a look at the action on the street. Scarlet thats right. Lets start with the dow industrials. 20 out of 30 members are higher right now. Some m a in the pharma space. At the same time, treasuries are gaining on disappointing factory data. The fomc meeting or announcement is on wednesday. All right, wti at a fresh sixyear low. Storage is nearing capacity. That means more pressure on prices. Quantitative easing, the weak euro, and centralbank divergence. The dax is at a record high with the final hour of european trading getting underway. The ftse the Oil Companies are the biggest decline or there. The cac 40 is climbing to a sevenyear high, as well. Swiss stocks are rallying today. I cant pull up the oneday chart, but the threeday chart that is not cooperating either. What you will see on the sixmonth chart is the benchmark stock index has recovered from almost two months ago. You can see that in the recovery. A lot of people said the stronger u. S. Dollar benefits swiss companies. Alex thanks. Stephanie way, way way back in 2012, the super pac was new and no one was quite sure what to make of them. President obama and mitt romney were super cautious. All of the major candidates are embracing these vehicles to raise unlimited cash to support their campaigns. Paging sheldon adelson. All of thelets bring in Phil Mattingly for more. Phil, how massive are they . How grotesque . How offended are we about to be . It seems that there is no amount of money to stand in the way of supporters trying to help them win. Phil we are talking billions when it is all said and done. What is interesting right now is how the game has changed on the fundraising side of thing. The rules have not changed since 2012. In 2012, obama and romney used super pacs to raise money. What is different now is the interaction between candidates. Back in 2012, obama and romney were cautious on how they dealt with super pacs. Lawyers were very wary about where the rules were. Now, no caution whatsoever. Once you enter the race, you are not allowed to coordinate with your super pac. If you have not, you can. Right now people are raising a ton of money on the candidate level for the super pacs before they even launch. The game is really just cranking up to another degree right now. Stephanie is this why we are seeing jeb bush and Hillary Clinton all over the place talking to the richest people in america . Phil no doubt about it. No fewer than eight potential candidates on the republican side have eightgroypups up and running. They have their Political Action groups. But they also have the super packs that they coordinate with them. If you are a donor, you give money and you hope you give it to the right right to rise. Every republican is the game has a super pac if they want to have a chance. Alex has john mccain or other critics of campaignfinance rules spoken out . Phil you have heard john mccain and Lindsey Graham talk about it. But you are not unilaterally going to disarm. President obama was uncomfortable about supporting super packs. He called out Supreme Court justices for allowing Citizens United to go through. But the judgment was made within president obamas Political Team that you could not see this ground to mitt romney cede this ground to mitt romney. Even the most critical politicians say, even if we dont do it, we wont win. The big thing is that there are no major moves to change the system on the inside right now. Stephanie yikes. This kind of breaks my heart. It is going to be so revolting. And we have not even approached the reaction election yet. How to watch tv anytime, anywhere, on almost any device. Stephanie welcome back to Market Makers. Im stephanie ruhle. Over the top video is getting red hot as tv companies pour money into streaming services. Nbc cbs, and hbo are the latest Companies Launching services outside the traditional cable bundle. Lets talk about it with one of the leading thinkers on the convergence of technology and media. He was president of sling media which lets you stream cable channels on multiple devices. He is now the ceo of a tech and media newsletter. Bloomberg is an investor. Lets break this down. What is sling tv . It is the ability to get a smaller package of Television Channels via the sling technology and something that has been on the verge for a long time. The biggest pressure the cable business has right now is that Consumers Want lower price points. That means packages are smaller and puts pressure on viacom and discovery. Alex what does viacom and discovery do . Jason theyve got to be thinking about overthetop. Leverage pays a big plays a big part of it. Now, the battle is on. Places like dish and time warner and others have been pressuring to only get stuff that the Consumers Want. Ultimately, if you cannot shuffle that in on the deal, you will try to find an audience overthetop. Alex what happens . Viacom owns 1015 networks. What happens to the other 12 networks that are not as popular as the three . Jason Cable Companies know how popular your tv networks are. The next stage is that is there an audience online for those networks . Or you go to a place like youtube and you can build a cable strategy from the lower channel up to the top of the mountain . Stephanie can youtube really . Youtube has not been able to make any dell. Discovery makes a lot of money. Jason maybe they are not making a profit, but 6 billion is dough. Certainly, their subscription projects are very early in their inception. I would not count youtube out. You have hulu, netflix, and a host of other Services Going direct. Stephanie if you are discovery or viacom and you do have channels that people dont care about, why not end them . Jason it has to do with the overall value of the deal. Ultimately, when you package these channels together, you are getting more incremental value depending on how the Companies Look at it. Sometimes they are not even racked up in the deal. You do not even know what the percept price is on the channel. Alex has wall street, on to this, do you think . There are a number love Cable Networks number of Cable Networks that you could define as being vulnerable and yet they still have not taken much of a hit. Jason tv is still a huge business and is not going anytime anywhere soon. It is entrepreneurs to think about where should we be in the future . Hbo relies is they are under pressure from netflix. They have a great business in cable, but i imagine that hbos subs are not quite cord cutters. They realize where the business is going and you dont have to share revenue on top of that and you have a direct relationship with the consumer. Stephanie if you look at hbo or cbs, you think they are ahead of the curve. Jason for guys like me, they are not ahead of the curve. The problem is with entrepreneurs is that we do not have to make money right away. Hbo is a money machine. They have had to choreograph their moves. Cbs has over 100,000 subscribers. That is surprising to me. I certainly think they are moving at the speed that they should be moving and i would have liked to see them go to it earlier. Alex sling tv also has 100,000 subscribers. Is that the model . Are we going to see a whole bunch of 20 per month over the top services . Jason i think you will see the smaller bundles happen at the Cable Company and i dont think the user cares where they get it. To me, the concept of tv everywhere is that if i pay my cable bill, i should have access to those channels over the top elsewhere. I think you will see just overthetop for new players and for the companies that are already on cable. Stephanie what does this all mean for netflix . One would think that hbo available on the internet could hurt netflix. Jason netflix is incredibly strong with children. And children ruled a home. Stephanie my kids dont watch orange is the new black. Jason of course. They watch nice the nice colored programs in the kids area. Netflix is a tremendous value for the family. They are watching more hours. The average family watches more hours on netflix than they do on television. They have had Great Success with new programming. Hbo has one of the best, if not the best, library in television. They have first run movies. What hbo has to worry about is when it goes headtohead with netflix is what are they going to do with kids . If you have to make one decision in the household, are you going to make take the one that has family . Stephanie alex my oneyearold watches orange is the new black it is on in the background. Does that make me a terrible parent . Scarlet there you go. Stephanie there you go. Jason, thank you so much for being with us. Alex sherman just told us that his oneyearold watches orange is the new black. There you go. There you go. Alex it is time to bring you uptodate on the top stories of the morning. Procter gamble may get rid of its beauty brand. People familiar with the matter say they are exploring the sale of an ipo brand such as cover girl makeup and herbal essence shampoo. Sales of the Beauty Brands have lagged over the past few years. There is a big winner in pharmas latest big takeover battle. Saleant pharmaceuticals has accepted a deal from valeant. Salixs biggest product ares treatments for stomach disorders. Maybe Vladimir Putins absence does make the heart grow fonder. Putins absence lead to all sorts of rumors about his health. He remarked about the speculation saying that life would be boring without gossip. That is another netflix reference. House of cards. Stephanie welcome back to Market Makers. Im stephanie ruhle. Im here with my partner for the day, alex sherman. Shareholder meetings in miami today. So smart. Better than being in new york. What is going to happen to this company . Alex he is 91. His health is failing. He is not at the annual shareholder meeting. The question really focuses more on what is left what are they going to do . I dont think he wants to pair up with viacom, from the reporting we have done. The generic thinking behind this is after sumner passes and the company gets ownership control from a trust, one of the trustees is the viacom ceo. Stephanie what is lesss relationship with the vr fire come ceo . Alex they do not really get along. He has a great relationship with sumner redstone. Les does not really want to work for philippe. Les wants to run a big media company. Les does not want to work with philippe. What are his options . Maybe he can convince jeff to have time warner by cbs. We just showed you a graph. Les is one of the great media ceos, among anyone. Look at the outperformance from cbs compared not to just the s p. Stephanie cbss the white line. S p media. Alex the numbers on the left are percentage gains. Cbs shares are up 1000 from march 2009. Stephanie what do they have . Alex he is a great prime time programmer. Number two is the nfl. Stephanie csi. Alex he has leveraged those things and driven shares higher. Stephanie thank you for joining me today. Thank you for watching. That is it for Market Makers. See you tomorrow. Scarlet Bloomberg Television is on the markets. Lets take a quick look at the action midway through the u. S. Trading day. The dow was looking at a triple digit point gain after three straight weeks of losses. The big story is Interest Rates. A parrot weaker than expected factors leading to a dip in the dollar and speculation that the fed does not need to raise Interest Rates as soon as estimated. As soon as regulated, perhaps. Oil is on the move, touching a six year. Kevin kelly is with me. So the action that we are seeing in todays equities a recovery from three straight weeks of losses, ahead of an fomc announcement. What is the breakdown . Kevin what is really interesting it is what is going on in spx options. You are seeing about three times the much of puts as calls. The Options Market is really positioning ahead of one states fed meeting. We are seeing this as a gift. People concert hedging positions at a cheaper cost. Scarlet do you think the vicks is a good gauge for investor risk right now . Kevin that is a great point. Vix is only supposed to forecast 30 days out. You can look at the skew index which factors in the scale tail risk. Scarlet ok. That gives you some area of concern when you look at that. Kevin the baseline is 100 on the skew index and these are trading about 125. That is extremely elevated. People are putting on longerterm bets. Foreign currencies, ukraine happening, there is a lot still out there. People are focused on the fed meeting. Scarlet do we then get a catch up in the vicks . The vix . Kevin yes, moves are going to happen fast. You can already see people positioning thevix the vix going up. Scarlet lets stick with microsoft. A lot of fundamental concerns about the country after that company after the company after intel cut its forecast. What is the strategy . Kevin people need to focus on the Cloud Computing. Microsoft is the number two player in the Cloud Computing space come only behind amazon. They did that under a year alone. They had more Cloud Computing sales than salesforce. You can buy in october 42 call replace the stock, and have a long bet. Options are a great way to reduce your risks. This is a great way to replace that and mitigate the risk. Scarlet the loss seems minimal. The potential loss would be permissible compared to upside. Kevin kelly, thank you so much. Money clip is up next. Pimm welcome to money clip. Im pimm fox. Here is the rundown. West Texas Intermediate Oil falls below 44 per barrel there is too much crude and no place to store it. A look one year after russia positive annexation of crimea. Travel. Destination cuba. You can now take a direct flight from havana to new york